Textron Buys Airplane Manufacturer

Textron purchases aircraft manufacturer, sees good opportunities ahead

Textron, an American industrial conglomerate based in Providence, R.I., recently purchased the independent American airplane manufacturer Beechcraft for an estimated $1.4 billion. Beechcraft has built and sold both general aviation and military aircraft since it was created in 1932. It is best known for the King Air and Super King Air line of twin-engine, turbo-propelled civilian planes.

People interested in business news might want to pay attention to Textron's latest acquisition. The highly regarded Cessna Aircraft Company is a subsidiary of Textron and has major plans to use Beechcraft technology in the coming years.

Promising opportunities
Textron announced its plans to acquire the historic aircraft manufacturer in December 2013. When the deal is finalized, it will have combined two of the country's oldest aviation companies. Beechcraft fell on hard times in the last few years, filing for bankruptcy before emerging revitalized from the process in February 2013.

The economic downturn in the aviation market made it difficult for Beechcraft to unload the debt it accrued in a 2007 sale that was financed by Goldman Sachs and Onex Corporation. At that time, Beechcraft representatives reported that the company had more than $600 million in capital to help launch new products like turboprops and piston aircraft, as well as upgrade its existing fleet. The company also planned to continue building planes for the military.

Although Beechcraft had intended to remain independent, it was also entertaining offers to be purchased as soon as fiscal reports showed a return to health. In October 2013, Textron revealed it had an eye on Beechcraft. It avoided a bidding war with China's Superior Aviation Beijing Company after a deal between the Chinese and Beechcraft fell apart. One of the major selling points for Textron was Beechcraft's expertise in military aircraft.

The future of aviation
The merger will not only be a boon to local industries, but to the international aviation community as well. Cessna Aircraft, best known for their small piston-powered vessels and luxury business jets, is a subsidiary of Textron and welcomed the acquisition wholeheartedly. The knowledge and technical advancements of Beechcraft and the global influence of Cessna will combine two companies with a long history of advancing aviation technology. The collaboration can potentially create a comprehensive inventory of products and services that will benefit future generations of aviation enthusiasts. New technologies have the potential to bolster the aviation industry. As companies begin to use new technology, they will have to hire people with a background in business administration to make sure that office procedures run smoothly and clients' needs are met. 

This article is sponsored by Western Governors University, a nonprofit, accredited, online university. WGU offers online bachelor degree programs in business and online MBA programs. To find out more, please visit www.wgu.edu/wisecareers_business.

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